Last desperate act of the Chapter 11 three. Can't compete due crap product, have stolen money from their employees and dumped costs to the PBGC so have a whine to the government. Let's bring back BOAC, Pan Am and props!
Interesting article:
Court approves termination of United Airlines pension plans - World Socialist Web Site
In a devastating blow to 122,000 workers and retirees, a federal bankruptcy judge ruled May 11 that United Airlines may default on its pension obligations and turn over control of its pension funds to a federal agency that is already swamped by corporate pension defaults. Judge Eugene Wedoff approved the airline management’s request to terminate four pension plans—for pilots, flight attendants, mechanics and other ground service workers. The $9.8 billion pension plan default is the largest in US history.
The Pension Benefit Guaranty Corporation will take over the plans, but federal regulations limit the amount of pension payments it can make to a maximum of about $45,000 a year. The highest paid UAL workers, such as pilots, will face pension cuts of up to 50 percent, while lower-paid workers could lose as much as 20 percent. The pilots face a Catch 22: under one federal law, they are not allowed to work after age 60; under another, the proportion of their pension guaranteed by the PBGC is sharply reduced if they retire “early,” i.e., before age 65.
The actual amount the PBGC will underwrite is likely to be even less than the $45,000 maximum, since the agency’s resources will be exhausted within a few years by a tidal wave of corporate pension fund defaults. The initial round of defaults, notably in the steel and airline industries, has already put the agency $23 billion in deficit; the United default will add another $6.6 billion in pension liabilities to the PBGC’s balance sheet. United will give the agency $1.5 billion in notes and company stock to partially offset the pension liabilities, but these securities will be worthless in the event the airline is forced into liquidation.
The difference between the $9.8 billion United owes and the $6.6 billion obligation assumed by the PBGC is $3.2 billion. This staggering sum, owed to present and future retirees under the terms of their contracts, is simply wiped out. It is the equivalent of robbing each and every pilot, flight attendant and mechanic of $267,000—although for some younger United workers, especially pilots, the individual loss will be far greater.
That covers 10 of the 40 Billion, what makes these 3 so special that Open Skies doesn't apply!
Airline bankruptcies in the United States - Wikipedia, the free encyclopedia
Emirates brand:
Versus - Get your own peanuts!!